Move Over, Nvidia: Billionaires Are Selling Its Shares and Buying Up These 2 Artificial Intelligence (AI) Stocks Instead

Wall Street has fallen in love with the artificial intelligence (AI) trend. This is not surprising, considering that PwC analysts expect AI to add nearly $15.7 trillion to the global economy annually by the end of 2030.

Semiconductor giant Nvidia's (NASDAQ: NVDA) shares have gained nearly 430% in the past three years. While the AI trend is still going strong, many analysts now view Nvidia's shares as being priced for perfection. Challenges such as increasing competition, reduced pricing power, geopolitical and regulatory risks, and over-reliance on a few customers may negatively impact the company's share price in the coming months.

Billionaire investors such as George Soros of Soros Fund Management, Stanley Druckenmiller of Duquesne Family Office, Lee Ainslie of Maverick Capital, and David Tepper of Appaloosa Management sold shares of Nvidia in the second quarter, according to their 13F filings with the Securities and Exchange Commission. At the same time, many billionaire investors have been putting money into more reasonably priced AI stocks such as Super Micro Computer (NASDAQ: SMCI) and Microsoft (NASDAQ: MSFT).

Those two billionaire picks could be smart buys for retail investors, too.

Super Micro Computer

Super Micro Computer, also known as Supermicro, is a leading provider of server and storage solutions for data centers. Its shares are up by nearly 1,110% over the past three years, even after the stock fell by almost 64% from its 52-week high in March -- a slide mainly triggered by weak investor sentiment toward growth stocks. The company has delayed filing its 10K for its fiscal 2024, which did not go over well with investors, and an unfavorable report from short-seller Hindenburg Research also took a toll on the stock.

Despite this, increasing demand for AI-optimized infrastructure from data centers, enterprise customers, consumer internet companies, and governments remains a major growth catalyst. Bank of America expects the AI server market to grow at a 50% compound average rate over the next three years, and expects Supermicro's share of the AI server market to grow from 10% in 2023 to 17% in 2026.

Supermicro's servers stand out from other mass-produced servers because they are easily customizable to their owners' changing requirements, energy efficient, and effective in thermal management. Goldman Sachs has projected that data center power demand will rise by nearly 160% from 2022 to 2030. With data centers estimated to account for a whopping 3% to 4% of global power consumption by 2030, demand for Supermicro's AI-optimized servers integrated with liquid cooling technology should continue to rise.